Airbnb wants to go back to basics and focus on renting rooms – 05/03/2023 – Market

In 2008, Brian Chesky and his flatmate created a website to allow people with a spare room at home to receive tourists and earn extra income. It was the beginning of Airbnb.

Almost 15 years later, the company valued at more than US$ 75 billion wants to return to its origins. With fewer people willing to pay the price of an entire property when traveling, and pressured by a series of regulations restricting short-term rentals, the platform will start to focus more on renting rooms.

The strategy was presented by Chesky this Tuesday (2), in New York, along with other new features.

Although it was already possible to rent individual rooms through the platform, the new feature, called “Airbnb Rooms”, brings a different approach. The view in the app will be different, making it easier to switch between entire spaces and rooms. Additionally, information about privacy will be more prominent in this category, as will the host’s resume.

The idea is to encourage guests to consider this option when traveling. According to the CEO, the main reason for the new approach is inflation. In recent months, the cost of living has risen significantly in many countries, and providing cheaper options has become more important than ever.

“People want to save money, and this is one of the most affordable ways to travel,” he says.

In 2022, the average price for a private room on Airbnb was $67 per night, well below the price of an entire space and some hotels. In Brazil, the fare is around R$165.

Chesky remembers that Airbnb started as a way to stay in a room in someone else’s house. Rescuing this experience of traveling “disguised as a local” is the second reason for the new approach, he says.

However, the CEO admits that the strategy can also help the company face regulatory challenges.

In recent years, Airbnb has come under pressure from some cities with the passage of laws that restrict short-term rentals for houses and apartments.

In addition to complaints from the hospitality industry, neighbors complain about increased foot traffic in local communities and other nuisances that accompany overutilized space.

The regulations also seek to address the rise in rental prices, on the grounds that the preference for becoming a host on Airbnb has limited the supply of housing.

In New York, for example, a new law came into effect this year to restrict short-term rentals – which could mean the removal of up to 10,000 Airbnb listings in 2023 alone.

The new rules limit the rental of properties where the host does not reside, among other prohibitions, under the risk of a fine of up to US$ 5,000 for the property owner.

Santa Monica, California, has also imposed strict rules for renting entire units, as has San Francisco.

Last year, Lisbon temporarily suspended permits for new vacation rentals amid skyrocketing prices and a dwindling number of properties on the market.

“I think that [o Airbnb Quartos] will face these regulatory challenges, but we didn’t intend to,” says Chesky. “Now, it’s true that rooms are probably the least controversial of our offerings in the most markets.”

Asked if he considers the regulations unfair, the CEO says that it depends on each situation, highlighting that, whether they are fair or not, those impacted are the people who use the services, not Airbnb. “We are a platform, 85% of the money goes to the host,” he says.

According to him, most cities have been very reasonable and that it is the company’s duty to work to have a close relationship with the authorities, sharing data, helping to understand the impacts on activities and trying to adapt. “We’re in 100,000 cities and I always say it’s 100,000 unique relationships.”

Chesky says the company is also starting to publicize the benefits it brings to the city.

“When someone stays in an Airbnb, many times they don’t stay in a hotel district, they end up sponsoring local companies, understanding other cultures. There are many advantages”, she says, also noting that the majority of hosts in the US are women and health professionals, students and teachers.

“Now, if the city wants less tourism, we prefer to drive this tourism to cities that want it. This is the [nosso] kind of vision”, he adds.

As for the criticism that Airbnb negatively impacts local communities and helps drive up rental prices, Chesky says that part is the result of hasty conclusions.

“We have test cases. In San Francisco, where living is very expensive, many people assumed that the reason was Airbnb. There were laws passed in the city that regulated Airbnb, which restricted who could place a property [para alugar], which capped the number of nights and presumably removed the financial incentive for someone to have a full-time rental on Airbnb. When all this happened, the price of housing did not go down, it kept going up”, he argues.

“Airbnb is in 100,000 cities. You can see what happens to the cost of housing when laws are passed and when they aren’t. What you see is that prices keep going up,” he adds.

Regulatory challenges, however, do not appear to have impacted the company’s finances. Recently, the company surprised investors with the results for 2022.

The year marked a record for Airbnb, with revenue of $8.4 billion, up 40% year-over-year, and net income of $1.9 billion.

In 2023, the expectation is that 300 million people will travel and make their spaces available through the platform.

Chesky says he still intends to work “on new and crazy ideas”, but that before investing in new things, it is necessary to put the house in order and improve the segment that is the origin of Airbnb. That’s why the focus on the rooms.

During the event, the CEO presented more than 50 improvements made to the platform based on user feedback. The package includes changes to the app’s interface and navigability, allowing, for example, guests to customize favorites lists and see the total price of the property on the search page (with taxes already included).

The reporter traveled at the invitation of Airbnb